While addressing a joint press conference in Hanoi, after his summit with North Korean Leader Kim Jong Un, US President Donald Trump spoke not just about the Summit, but also the current state of US-China relations. Trump criticised his predecessors for not doing enough to address the trade imbalance with China, while also making the point that he was all for China’s economic progress and growth, but not at the cost of the US.

If one were to look beyond the Summit in terms of the US-Vietnam economic relations, top US companies – Boeing and General Electric – sealed some important deals.

Given the focus of Trump’s visit (which was the Summit with Kim), perhaps these deals did not draw the attention they ought to have. The fact is that the US has begun to recognise Vietnam’s economic potential, as well as its geopolitical significance in Asia. This long note will give a backgrounder to Vietnam’s economic growth story in recent years, highlight some of it’s key strategic relationships, and then examine the nature of the China-US-Vietnam economic triangle.

It would be pertinent to point out that US had imposed tariffs estimated at $200 billion in September 2018, Beijing imposed tariffs on $60 billion of US imports as a retaliatory measure, and US threatened to impose further tariffs. Interestingly, US trade deficit vis-à-vis China reached $34.1 billion for the month of September (in August 2018, it was $31 billion). Critics of Trump point to this increasing trade deficit vis-à-vis China as a reiteration of the fact that Trump’s economic policies are not working.

Ji Rong, spokesperson of the Chinese Embassy in India, said that tariffs will be detrimental for both India and China and, given the fact that both are engines of economic growth, it is important for both to work together.

At a time when a massive churn is taking place in the Donald Trump Administration (HR Mcmaster was replaced as head of the NSA by John Bolton, while Secretary of State Rex Tillerson was replaced with the more hawkish Mike Pompeo), Alex Wong, Deputy Assistant Secretary of State for East Asian and Pacific Affairs, gave a briefing with regard to the US vision for ‘Indo-Pacific’ strategy, on April 3, 2018 (a day before a trilateral dialogue took place between senior officials from India, Japan and US). Wong outlined the contours of the strategy, and spoke not just about the strategic vision, but also the economic vision of the US, with regard to the Indo-Pacific.

A backgrounder to the Indo-Pacific, Quad, and the China Factor

For a long time, the US referred to the region as ‘Asia-Pacific’ (which China prefers), but the current Trump Administration has been using the term ‘Indo-Pacific’. During his visit to East Asia and South East Asia, in November 2017, the US President had used the term more than once (much to the discomfort of China) giving a brief overview of what he meant by a ‘Free and Fair Indo-Pacific’. While speaking to a business delegation at Asia-Pacific Economic Cooperation, Trump spoke about ‘rule of law’ and playing by the rules. Former Secretary of State Rex Tillerson had referred to the Indo-Pacific and the Quad Alliance (consisting of US, India, Japan, and Australia) in an address at the Center for Strategic and International Studies (a Washington think tank) in October 2017, a week before his India visit.

In order to give a further thrust to the Quad, representatives of all four countries met on the eve of East Asia Summit in Manila. A statement of the Indian Foreign Ministry said: Continue reading →

The Chinese Communist Party, on February 25, 2018, made a significant announcement — that the two-term limit for Presidency will be abolished through an amendment to the constitution. This means that current President Xi Jinping will be President for life. This amendment was tabled on March 6, 2018 by the Communist Party during the two week National People’s Congress (which began on Monday, March 5, 2018).

According to a CNN recording, Donald Trump, while reacting to this development, stated:

He’s now president for life, president for life. And he’s great. And look, he was able to do that. I think it’s great. Maybe we’ll have to give that a shot someday.

Trump’s views with regard to China have not been consistent, as is the case on many other issues. Candidate Trump had used tough language for China; at one campaign rally, for example, candidate Trump stated:

We can’t continue to allow China to rape our country and that’s what they’re doing. It’s the greatest theft in the history of the world.

During his visit to China in November 2017, the US President had, interestingly enough, criticized his predecessors, and said that he does not hold China responsible for the skewed trade relationship:

[…] I don’t blame China. After all, who can blame a country for taking advantage of another country for the benefit of its own citizens? I give China great credit […] I do blame past [US] administrations for allowing this out of control trade deficit to take place and to grow. We have to fix this because it just doesn’t work […] it is just not sustainable.

While the US President is unpredictable, the criticism of his predecessors on foreign soil came as a shock to everyone.

Trump’s recent praise of the constitutional change which will enable Xi to be President for life may have embarrassed many Americans and Liberals in other parts of the world. They would have perhaps expected the US President to raise a red flag.

The fact is, however, that many of Trump’s foreign policy decisions – withdrawing from the Trans Pacific Partnership (TPP) trade deal in January 2017, or repeatedly criticizing NATO (North Atlantic Treaty Organization) and stating that members are not meeting their ‘financial obligations’ or, more recently, the imposition of tariffs on imports of aluminium and steel – are embarrassing steadfast allies in Asia and Western Europe. All these decisions have sent a message globally that Trump’s view of the outside world is driven by domestic politics and transactionalism – and not realism as some would have us believe. This is in contrast to his predecessors, who valued relationships but also understood the relevance of common democratic values as a binding thread. Trump on the other hand is quite comfortable with authoritarian leaders.

Trump has often expressed admiration for authoritarian leaders like Vladimir Putin, and Phillipines President Rodrigo Duterte. Duterte, who is controversial for using extrajudicial methods to deal with a Filipino drug problem, has presided over a drug war that has cost the lives of more than 4,000 people. While praising Duterte, Trump said:

I just wanted to congratulate you because I am hearing of the unbelievable job on the drug problem. Many countries have the problem, we have a problem, but what a great job you are doing.

During their meeting on the sidelines of the ASEAN Summit in Manila (November 2017), Trump did not sufficiently raise US human rights concerns, and was criticized by many American politicians, including Republican Senator John McCain. The US-Philippines Joint Statement, while speaking about the challenge of the drug problem, did refer to a human rights issue (issued after the meeting between Trump and Duterte):

The two sides underscored that human rights and the dignity of human life are essential, and agreed to continue mainstreaming the human rights agenda in their national programs to promote the welfare of all sectors, including the
most vulnerable groups.

While the US has been in bed with authoritarian regimes in the past and turned a blind eye on many occasions to human rights violations, no one can deny the fact that even transactionalist Presidents like Ronald Reagan paid lip service to democracy and human rights. In a speech at Westminster, Reagan stated:

Democracy is not a fragile flower […] Still it needs cultivating. If the rest of this century is to witness the gradual growth of freedom and democratic ideals, we must take actions to assist the campaign for democracy.

Similarly, George W Bush, who was often thought of as being very simplistic, spoke about the importance of democratic values as a common binding factor with many of its allies.

Conclusion

In conclusion, while reasonable ties between Washington and Beijing are good news, Trump’s public appreciation of authoritarian leaders and their methods is worrying because at the global level there is a feeling that authoritarian leaders and systems deliver better results compared to chaotic democracies.

The US has always been the flagbearer of democracy, liberal values, and human rights. It is a matter of concern, then, when the leader of such a country pays little attention to these issues. In a way, Trump has played a pivotal role in wrecking the liberal order, and by doing so has created a situation where Beijing will not have to change its ways, but may well create a parallel order which many countries will be willing to join due to China’s economic prowess.

While there is absolutely no doubt that Donald Trump has on more than one occasion sent harsh warnings to Islamabad – calling upon Pakistan to give up its support for terrorist groups or face the consequences – Trump’s predecessors had begun to reduce aid to Pakistan. During the Obama years, for example, American aid to Pakistan dropped from over 2 Billion USD in 2014, to a little over 1.1 Billion USD in 2016.

In his latest tweet, Trump minced no words, saying that Pakistan had fooled the US all these years, and that US will not take this lying down:

The United States has foolishly given Pakistan more than 33 billion dollars in aid over the last 15 years, and they have given us nothing but lies & deceit, thinking of our leaders as fools. They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!

Trump tweeted early morning on New Year’s Day.

Earlier in the year, during his August speech pertaining to Afghanistan, Trump had categorically stated that it no longer could be business as usual, and that Pakistan needed to stop extending support to the Haqqani network and other groups. Said the US President:

We have been paying Pakistan billions and billions of dollars, at the same time they are housing the same terrorists that we are fighting. But that will have to change. And that will change immediately.

A number of senior officials in the Trump Administration, such as the Secretary of State Rex Tillerson, Defence Secretary Mattis, and Vice President Mike Pence have hinted that harsh steps for Islamabad are a real possibility, some of which include not just withdrawal of aid to Pakistan, but also the removal of Pakistan’s non-NATO ally status.

During his recent visit to Afghanistan, Pence stated that President had put Pakistan on notice. Said Pence: “President Trump has put Pakistan on notice. As the President said, so I say now: Pakistan has much to gain from partnering with the United States, and Pakistan has much to lose by continuing to harbor criminals and terrorists.”

Pakistan must contribute by combating terrorist groups on its own soil. We are prepared to partner with Pakistan to defeat terror organisations seeking safe havens, but Pakistan must demonstrate its desire to partner with us.

China – which has strategic and economic interests in Pakistan, with the primary one being the China-Pakistan Economic Corridor (CPEC) – has stood by Pakistan. While reacting to Trump’s August 2017 address, State Councillor Yang Jiechi said:

“We should attach importance to Pakistan’s important role in Afghanistan and respect Pakistan’s sovereignty and legitimate security concerns.”

India’s reactions

New Delhi has understandably been closely observing these events. Trump’s warnings to Pakistan are viewed as positive news for India, and the Trump Administration has also pleased New Delhi by speaking against violent groups that are targeting India. The US, for example, has lent support to India’s demand for declaring Jaish-E-Muhammed (JEM) Chief, Masood Azhar, a designated terrorist by the UN (this move has of course been stalled by China).

Realists in New Delhi will however be keeping an eye on the following issues.

First, sections of the political class in Pakistan, as well as old hands in the American administration will not allow things between Islamabad and Washington to go downhill. A number of Pakistani politicians, such as Sherry Rehman, have already stated that while Pakistan should have its own independent policy, and it should not be submissive, it need not be excessively aggressive. While such politicians may not publicly say so, the fact is that there is a large swath of the Pakistani population which may not be very comfortable with the US, but is even more uncomfortable with the increasing Chinese presence in Pakistan as a consequence of CPEC.

In the US too, there are sections in the State Department which follow the approach of engaging with moderate forces in Pakistan given the country’s strategic importance. There is a section of the US establishment which does not want Pakistan to totally drift away from Washington’s orbit, mostly because China is beginning to take a larger role in the whole of South Asia, including Afghanistan. One of the declarations of the first Foreign Minister-level trilateral dialogue between China, Pakistan, and Afghanistan was the extension of (CPEC) into Afghanistan.

Said the Chinese Foreign Minister:

So China and Pakistan are willing to look at with Afghanistan, on the basis of win-win, mutually beneficial principles, using an appropriate means to extend CPEC to Afghanistan.

Both New Delhi and Washington will closely watch this development.

Apart from Beijing, Pakistan will rely on Saudi Arabia to soften Washington’s approach vis-à-vis Pakistan. The Sharif brothers, both Nawaz and Shahbaz, have strong connections in Saudi Arabia and while there were speculations that the Saudis were trying to broker a deal between the Pakistani military and the Sharifs, there is also a view that there’s an understanding between the Pakistani army and the Sharifs, and that the latter would use their links in the Saudi establishment to soften the Trump Administration, which has strong ties with Riyadh.

In conclusion, there is an increasing awareness with regard to the nexus between the Pakistani army and terror groups targeting India. Yet New Delhi should be more realistic in its calculations, and it needs to not just bank on Washington. Instead, India should also leverage its economic ties with Riyadh and Beijing to put more pressure on Pakistan. While there is no doubt that strategic convergence with Washington has increased phenomenally, Trump’s harsh words against Pakistan are not just driven by any conviction, but also by simple transactionalism. This very transactionalism has also created space for China to become more pro-active in South East Asia and South Asia. New Delhi thus needs to be pragmatic, deft, and leverage its economic rise more effectively.